TECH Uber-Valued Study

A new study published by the Industrial & Labor Relations Review has concluded that Uber is a fair employer. But critics remain skeptical and local bans, like those in Germany, are unlikely to change.
Quelle: Bloomberg
A new study finds Uber to be a fair employer.

A new study published in the Industrial & Labor Relations Review investigates the fairness of pay and labor conditions for Uber drivers. It should come with a warning about the fairness of publishing a study penned by people on Uber's payroll.

One of the study's authors, Alan B. Krueger, is a professor of economics at the world-renowned Princeton University and a former Uber adviser. The other, Jonathan Hall, is head of policy research at Uber. As one might expect, the authors had only positive things to say about the ride-sharing company.

Accordingly, many find the study's conclusions uncompelling, and it is unlikely to have any effect on policy in countries like Germany, where Uber has experienced bureaucratic roadblocks designed to protect the established taxi industry.

Mr. Hall and Mr. Krueger insist that “drivers with a partnership with Uber earn, on average, at least as much as a taxi driver, probably even more.” They also state that Uber partners “value the platform because of the flexibility and high pay” it offers.

However, Hubert Horan, author of the paper “Can Uber Deliver?” was unsurprised by the company's strategy. “Uber buys PR people, preferably those that have worked at the upper levels of government.” Indeed, this is true of Mr. Krueger, who has worked for both the U.S. Departments of Treasury and Labor.

Other critics have also challenged the methodology of the study. “An independent study would have also included drivers that had left the company,” said Stan Liebowitz of the University of Texas.

Mr. Hall and Mr. Kruger's findings also contradict much of the other published reports in circulation. For example they note that “38 percent of Uber partners have employer-financed health insurance”. However, Nils Braun-Dubler and Stefan Meyer at the Institute for Business Studies Base found that Uber itself does not pay benefits for its employees. Drivers are either privately insured or insured through another job.

Mr. Horan also points out that Uber drivers tend only to earn well for the first year as a partner with the company. In several cities, Uber has also raised the commission it asks from drivers, reducing the share they receive.

Last month, the German government drafted a motion that would create a clearer legal framework for sharing economy businesses like Uber or holiday home rental site Airbnb. Whether these companies can overcome the legal challenges that have prohibited their growth in Europe remains to be seen. For now, Uber in Germany continues not to live up to its name.

 

Norbert Häring covers monetary policy, exchange rates, credit markets and the latest scientific developments in economics for Handelsblatt. To contact the author: [email protected]